Upload
social-impact-strategies
View
235
Download
1
Embed Size (px)
Citation preview
CSR and its importance:
A commercial perspective
This presentation (the “Presentation”), is being provided solely to the intended recipient. The Presentation is strictly confidential. Save as specifically agreed in writing by CLC
Asia and APS Ventures Co., Ltd. (“CLC Asia”), the Presentation must not be copied, reproduced, distributed or passed, in whole or in part, to any other person. The Presentation
must not be used for any other purpose without the prior written consent of CLC Asia . The Presentation has been prepared on the basis of information provided by CLC Asia
and also from publicly available information. This information, which does not purport to be comprehensive, has not been independently verified by CLC Asia. The Presentation
does not constitute an audit or due diligence review and must not be construed as such. No representation or warranty, expressed or implied, is or will be made and, save in
the case of fraud, no responsibility or liability is or will be accepted by CLC Asia or by any of its officers, servants or agents or affiliates as to or in relation to the fairness,
accuracy or completeness of the Presentation or the information forming the basis of this Presentation or for any reliance placed on the Presentation by any person
whatsoever. In particular, but without prejudice to the generality of the foregoing, no representation or warranty is given as to the achievement or reasonableness of any
future projections, estimates, prospects or returns contained in the Presentation. This Presentation does not constitute an offer or invitation for the sale or purchase of
securities or any businesses or assets described in it, nor does it give legal, tax or financial advice.
2
Definitions of CSR….
...a concept whereby
companies integrate social
and environmental
concerns in their business
operations and in
their interaction with their
stakeholders on a voluntary
basis.
...the commitment of
business to contribute to
sustainable economic
development, working with
employees, their families,
the local community and
society at large to improve
their quality of life.
EUROPEAN COMMISSION WORLD BUSINESS COUNCIL
No ‘one’ set definition.
But should business really partake in CSR?
There exists a traditional divide with where businesses sit and how they should be viewed
‘MILTON FRIEDMAN’ VIEW
COMPANY
COMPANY
AS PART OF A NEXUS OF STAKEHOLDERS
Suppliers
CommunityEmployees
Customers
Acts in the best interest of shareholders, maximisingshareholder value
Demonstrates financial benefits of CSR also
addresses shareholder value
Environment
Benefits to business from CSR activities (1)
Typical benefits cited when conducting CSR activities
EMPLOYEE
SATISFACTION
COMPETITIVE
ADVANTAGE
REPUTATION &
LICENSE TO OPERATE
RISK & COST
REDUCTION
Benefits to business from CSR activities (1)
Firms use CSR to set themselves apart from competitors
Competitive
advantage
ACTIVITY DESIRED BENEFITS
1 Equal opportunity practices
2 Investor relations
Inclusive policy:
•Obtain workforce from widest
possible talent pool
Institutional investors actively seek
out companies with good records
in:
• Good industrial relations
• Environmental and community
stewardship
•Corporate governance
Firms active in social, cultural and
educational fields help influence
the decisions of firm stakeholders
Benefits to business from CSR activities (2)Reducing
costs and
risks
ACTIVITY DESIRED BENEFITS
1 Equal opportunity practices
2Energy savings and
environmentally sound practices
3 Better community relations
Inclusive policy:
•Improves morale
•Reduces turnover and
absenteeism from disgruntled
employees
•Lower present and future
compliance costs
•Enhance efficencies
•‘Sanctioned member’ of community
•Less opposition and intrusive
regulation
•Governments pre-disposed to offer
incentives (e.g. Tax advantages)
Benefits to business from CSR activities (3)
You can’t go to a government department to obtain a social license to operate….Reputation
and license
to operate
1 Having a strong reputation…
DESIRED BENEFITS
•Legitimacy in the eyes of the
community
•‘Sanctions’ a firm to operate in its
desired environment
• Legitimacy across your entire
supply chain and with consumers
But…reputation and social license are
intangible. They differ for each company
and differs between stakeholders.
Some figures….Much of CSR is wrapped up in intangibles, or preserving intangible value. But here are
some interesting figures…
Reputation helps preserve intangible value…
96%
Intangible value of
Coca-Cola’s brand
53%
Estimated intangible value of
fortune 500 companies in 2013
Profit: $1.08 Trillion
Revenue: $12.21 Trillion
Reputation helps provide the foundations of real value…
85%
Consumers who
have a positive
image of companies
who make the world
a better place86%
Institutionall
investors who
believe that CSR has
a positive effect on
business3 out of 5 workers want to
work with a firm who value
aree consistent with their
own
Why does this matter?
DO NO HARM
Constraints on foreign investors working in emerging markets
Foreign
Corrupt
Practices
Act
Bribery
Act
Legislation Ethical behaviour standards
Non-governmental oversight Press coverage
13
Investors are paying careful note of doing due diligence on JV partnersThere are more elements to due diligence than traditionally looked at by law firms and financial advisors
Legal DD Financial DD
Everything in
between!
• Reputation
• Corruption
• Adverse links to government
• How they deal with other stakeholders
Case study….Burmese slaves on shrimp boats (Thailand)
Large companies in the west,
under pressure from
stakeholders will ensure that
their supply chains are as
ethical and reputable as
possible
But global supply chains mean that companies can no longer hide or rely on consumer apathy.
Case study….supply chain for shrimp boats (Thailand)
Fishing boats
collect fish meal.
Estimated small
minority with
slaves.
Feed sold to
shrimp
consolidator
Consolidators
sell to shrimp
farms
Frozen
shrimp,
fed with
slave
derived
feed,
frozen
and sent
to
western
markets1
2
3
4
But despite safeguards along the way, it is still important to realise that your supply chain extends much further
Case study….Lessons Learned
1 Economics of your entire supply chain needs to be understood, examined,
supervised....and fair...
2 Suppliers who don’t meet ethical standards will be cut
Controversies such as this can kill of one countries ability to supply global
markets
The issue is taken seriously at the highest level, and can delay other business
deals
Don’t be scared to work with your partners to raise CSR standards
3
4
5
Contact us
17
Please contact:
Christopher Larkin
Managing Director
c/o AWR Lloyd Offices
87/1 All Seasons Place, Capital Tower, 26th Floor,
Wireless Rd.,
Lumpini, Pathumwan, Bangkok, 10330
Thailand
t: +66 81 866 1002 (Thailand)
www.clc-asia.com